100 billion check-based transactions are made in the United States each year. Many of these check transactions are still cleared by physical processing and transporting of the original printed paper check. When checks are processed for payment, the routing and account information on the front of the check is read, and images are captured of the front and back sides of the check to capture information written on the check by a payor and any endorsements on the back of the check by the payee. Check processing systems at financial institutions do so by passing a large number of checks through large check processing systems to enter these checks into the financial systems computers for payment.
There is an increasing desire to place check processing systems at places of business, thereby allowing the business to digitize the information on the check. This eliminates the requirement that the business send the physical check to the source bank or other financial institution prior to getting paid, reducing transport delays. The drive to ‘truncation’, or reduction in transport time, has been accelerated by legislative measures in the United States and other nations. For example, the U.S. Check Clearing for the 21st Century Act 2003 (HR 1474 S1334), aka ‘The Check 21 Act’, which went into effect in October 2004, enacted legal frameworks and standards for the electronic interchange of digital facsimiles of original financial instruments within the U.S. However, existing check processing systems that digitize check content are large, expensive, and can be difficult to operate. These larger check processing systems, despite operating at a high rate of speed, need to move checks a large physical distance during processing, thereby increasing the latency of these machines and limiting throughput
Recently, smaller and faster check processing systems, having shorter document travel distances, have been made which allow reading and scanning of checks to improve on these latency/throughput issues. However, these systems have limited functionality, in that they typically do not allow endorsement based on information discerned from the checks, do not allow endorsement of only successfully read checks, and do not scan or otherwise capture images relating to endorsements. Furthermore, these systems often will not accept variable-sized checks for reading, scanning, and endorsing.
For these and other reasons, improvements are desirable.